The Card Con

Fifteen novice gamblers trusted $2.25 million to their gambling "coach." But the coach's plan was a scam that would collapse

Like all good confidence scams, this one was built on a foundation of greed and gullibility. It promised quick money with limited labor. The stakes were high, but the impending reward was tremendous: $1 million in 90 days. It was presented in black and white, with numbers that appeared mathematically sound. Adding an extra element of allure, the million dollars would be coming out of Las Vegas casinos. But what made this scam truly amazing was something that Carl Ponzi would have killed for: under optimal conditions, in a perfectly honest world, the money-making scheme being dangled really would have worked.

Its clear-cut viability short-circuited all the cynicism and caution from the brain of Tom Hastings (names and some details have been changed), a 45-year-old CPA from Los Angeles, as he read a newspaper ad asking for blackjack players who wanted to win big. A long-term mediocre casino habituÈ who had mastered basic strategy and owned every card-counting guide that the Gambler's Book Club sold, Hastings loved the game and was dying to beat it through what he perceived to be his intellectual superiority. He called an 800 number listed in the ad, spoke with a man on the other end of the line, and arranged to meet with him in a posh hotel suite near The Sunset Strip.

Well into his 60s, tall and skinny, wearing an obvious toupee, Richard Chapman didn't appear to be the kind of person who could make anyone rich. But Hastings was impressed by the digs. He noticed three blackjack tables situated around the living room and a half-dozen bank bags fanned out on an end table. Resembling oversized pencil cases, they appeared to have gotten plenty of use. "Each one can comfortably hold a brick of money," Chapman said in a casual, offhanded way. "You know what a brick is, don't you?"

Hastings shook his head. "It's a pack of 500 $100 bills -- $50,000. Play blackjack with me and you will get used to carrying two of these into every casino you enter."

Over the course of a three-hour conversation, Chapman patiently answered Hastings' questions and explained how the money-making operation works. Fifteen people each kick in $150,000, resulting in a combined bankroll of $2.25 million. With that money, they play blackjack, the Chapman way, and increase their investments by seven times within a 90-day period -- after Chapman has taken 40 percent of the winnings as his own payment. In exchange, Chapman promises to teach team members how to count cards (a winning system in which you keep track of the blackjack deck's progress, betting high when the deck is rich in aces and picture cards, and low when it isn't), manage the team in Vegas (keep the players rotating in and out of different casinos), and provide them with schemes to keep the card-counting invisible. That last element is an important one, since casinos ban card counters.

To sweeten the pot, Chapman showed Hastings a photo album. It was filled with shots of previous teams in action, displaying gamblers in ornate Vegas suites (comped by casinos, under the assumption that the players are high-rolling suckers), posing alongside pyramids of banded hundreds. In one shot, a burly fellow was kneeling down and kissing the money. A magnum of Moët & Chandon could be seen in the background. Hastings asked for references, somebody from a past team with whom he could speak. "Not possible," replied Chapman. "All my players sign confidentiality agreements and I give them the same courtesy."

Hastings left Chapman's hotel with an as yet unsigned contract that laid out the rules of team play and the ways in which money would need to be invested and paid out. Hastings felt that $150,000 was too much for him to risk -- but he could not shake the notion that this seemed like a once-in-a-lifetime opportunity, something that no beaten blackjack player could turn away from. Making the decision trickier, he couldn't say that he completely trusted Chapman, but everything that Chapman told him about card counting -- including the $500 to $5,000 bets that would be spread to accommodate shifts in the deck and the advantages of minimizing volatility through team play -- rang true.

Slowly, over the course of a few weeks, encouraged by sporadic calls of encouragement from Chapman, Hastings convinced himself that the investment was sound. He dipped into various mutual funds, scraped together the payments, and signed on. He spent long weekends with Chapman, learning to card-count, and surprised himself by the high level of proficiency he was able to rapidly achieve. One afternoon, Chapman put Hastings to the test: he dealt 10 shoes of cards and Hastings was required to make fewer than 0.7 mistakes per shoe. He passed with flying colors.

At the same time, Hastings played the important role of recruiter. Because of his professional status as a CPA, Hastings was able to convince other professionals to sign on. Attorneys, corporate executives and even one casino vice president bought into the dream. They put up their 150K and worshiped at the temple of Chapman, spending long nights learning the card-counting system and gossiping with one another on the weekends. "We used to talk about Chapman all the time," Hastings remembers. "We were always discussing whether or not he was for real, whether he should be trusted, but it always came back to the same thing: there were more of us than there were of him. If he tried to pull something we didn't like, we would be able to overrule or overpower him."

As weeks passed, with Chapman now holding 10 percent of each player's investment, team members had mounting reasons to be concerned. Because he couldn't find enough people to put in $150,000 each, Chapman bulked up the team with smaller investors, people who paid chunks of the $150,000 entry fee. They wouldn't all be able to play in the casinos, but they would function as "observers," the idea being that they'd watch the players and serve as insurance that no thievery went on. "I didn't like the idea of all these guys coming in for less than 150," says Hastings. "I felt that they would have the incentive to steal from us. But it's what Chapman wanted to do, and we were all willing to listen to Chapman. He was, after all, the expert."

Still, the team began to see troubling signs. Though Chapman insisted that drinking at the tables was verboten, he revealed himself to be something of a boozer, swigging Long Island iced teas during dinner and passing out while dealing cards at the blackjack tables in his hotel suite. "He'd be sitting there, out cold, drooling like a baby, and we would carry him to bed," remembers Hastings, adding that Chapman's generally mellow disposition could easily swing into something sinister and unpredictable. "We would make suggestions -- the main one being that the stakes we planned on playing were too high. The argument was that we would draw too much attention by spreading $500 to $5,000. We figured that $100 to $1,000 would make it more likely for us to keep playing without getting watched. When we told that to Chapman, he blew up, screaming, 'I'm Hitler! You will goose-step to my marching orders!' Then he started sobbing, with real tears running down his face."

It was unsettling, but the promise of $1 million loomed and that made it easy to overlook a lot. Plus, Chapman's system really worked. The team members endlessly practiced on the tables in Chapman's hotel suite and they saw their hypothetical fortunes continually increasing. It looked like an unbelievably great proposition. Even if the guy was unstable, who'd want to turn away from that kind of money? Certainly not Hastings.

After three months of training, the team was ready. They flew to Las Vegas, each traveling with $135,000 in cash (the initial $15,000 installments had already been paid). They checked into comped hotel rooms from one end of the Strip to the other and convened at a Hilton suite where the money was piled into a huge stack. Hours were devoted to counting cash, and the suite warmed up with the body heat of 20 highly strung people. Guys took off their shirts while room-service waiters kept parading in and out with food and Champagne. Hastings remembers it being "a real frat house environment."

It was agreed that three team members would each be responsible for one-third of the cash, stacked in duffel bags, and transferred to hotel safes -- minus each team member's playing bank, which ranged from $50,000 to $110,000 every day. To the team's collective surprise, Chapman took $110,000 for himself and announced that he would be playing as well. This generated a rousing series of high fives. Their million-dollar payday was coming into sharp focus.

The euphoria continued to build the next afternoon. Hastings entered the Luxor, where he had checked in as a fully comped high roller and deposited $87,500 in the cage. Accompanied by his observer, he made his way to the casino's high-limit area and proceeded to play blackjack. It was the greatest gambling experience of his life. Everything unfolded exactly as planned.

The only thing to dampen his enthusiasm were the casino employees who scrutinized his play. Hastings complained that they were cramping his style. They replied that the high-stakes area wasn't very crowded and they had nothing else to do. Hastings looked around and he had to agree. He was the big player. By the end of his session, he was ahead by nearly $120,000. After cashing out and bringing his profits to the Hilton, Hastings was thrilled to discover that other team members had won as well. All told, the team was ahead by several hundred thousand dollars. Chapman had lost his entire $110,000 playing bank, but it was no matter. They all knew it could have happened to any one of them, and, besides, the overall profits (the only profits that really mattered) were phenomenal. Team members dined on steaks and hit a string of go-go bars that night, not skimping on the lap dances.

Early into Hastings' next day of play, he was greeted by a Luxor pit boss who had been watching him the day before. With a big grin on his face, Hastings pointed to his mounting stack of chips. He was already ahead by $14,000. The pit boss did not smile back. "I think you know what this is about," the pit boss told Hastings. "You are no longer allowed to play blackjack in this casino. You can stay here, you can play other games, but no more blackjack. If we see you playing blackjack, we will have you physically removed." The pit boss didn't say it, but his point was obvious: he'd concluded that Hastings was a card counter.

Heartbroken, Hastings immediately called Chapman, who told him to spend the rest of the day in his room at the Luxor and not worry about it. That night, when the team reconvened at the Hilton, it became clear that several other members had been spotted and barred. The winnings were considerably less than the day before, and, once again, Chapman had lost all his money. Team members were getting suspicious, but there was so much going on -- and Chapman did have an observer -- that it was difficult to make a big fuss about his losses.

Hastings and others, as they got spotted, were rotated into smaller casinos and instructed to play for lower stakes. At that level they didn't attract heat, but the team's profit making lost its momentum while Chapman continued to exhaust most of his bankroll each day. After a week in Vegas, emotions frayed, tempers flared, and everybody was accusing everybody else of ripping off the team.

That afternoon Hastings and four of the other top players received phone calls from Chapman. He wanted to see them at Mr. Lucky's, the Hard Rock Casino's coffee shop. Over sandwiches, he announced, "I'm calling a meeting this afternoon and disbanding the team. It isn't going as well as I had anticipated."

Chapman waved aside the guys' protests and said his decision was final. Then he threw another curveball: instead of meeting at the suite in the Hilton, they would hook up at a small Marriott Hotel near the airport and divide the money. Hastings immediately found this suspicious -- a reasonably unsecure hotel, located off of a busy road, five minutes from the airport, with more than $2 million in cash? -- and told Chapman as much. "But," he now relates, "Chapman's word was law."

As had been previously agreed, Chapman immediately took $40,000 in expense money off the top of the group's bankroll. Then he announced that he'd be getting 40 percent of the remaining money, which would have been around $700,000. The team balked. Chapman insisted that he had given them the equivalent of a law school education. After much deliberation and arguing, it was agreed that Chapman could walk away with a total of $130,000. Once the remaining money was split, Hastings found himself about $20,000 in the hole and felt more than a little skeptical about Chapman's continually depleted playing bank.

Why was Chapman the only consistent loser? "Because," Hastings eventually realized, "he was keeping the money and cutting in his observer -- a guy who, it turned out, had financial problems." In all, Hastings estimates, Chapman embezzled $500,000 from the team. "That's 500,000 cash. It's what a partner in a good-sized law firm makes annually."

After the team disbanded, Hastings remained in Vegas for another couple of weeks. He was being comped at the Hard Rock, playing for $100 to $500 per hand, and operating under the radar. After using the Chapman system to win back the $20,000 and then some, the scam didn't seem like such a big deal to Hastings -- until his casino host came over and told him he was barred.

Hastings was surprised that he would suddenly be picked off as a card counter after having played undetected for two weeks. Upon arriving home, however, he discovered that he and the other team members were front-page news on a bulletin faxed to casinos by the Griffin Detective Agency, a Las Vegasñbased company that monitors card-counters and cheats. Their faces dominated the page and they were singled out as crack blackjack specialists. Hastings tracked Chapman to New Mexico and called to see if he knew anything about it. "I know all about it," Chapman coolly told him. "I'm the one who put you in there. I was pissed because you and the others wouldn't give me my full cut of 40 percent. I walked into the agency wearing a mask -- so they couldn't recognize me -- and gave them your names and the casinos where you had been caught counting. Now you'll never get comped in Las Vegas again."

The incident turned an enraged Hastings into an obsessive tracker of Richard Chapman. Hastings says he discovered that the photo albums contained real pictures of real teams in Las Vegas -- but they were taken during the early days of the trips, before everything unraveled, as it always does for those aligned with Chapman. Hastings also reports that Chapman has since scammed two other teams. One had its opening-night meeting in an off-Strip hotel room similar to the one where Hastings' team had its last. The room was raided by pistol-wielding thieves who stole the entire stake of $2.5 million. Considering that one of the team members was the same person who had previously been Chapman's observer, the "heist" seems, at best, suspicious. The next team blew up after a matter of days, with much of the money missing and unaccounted for.

Warning that it's time for Chapman to strike again (as he seems to do every two years), Hastings says, "I could have gotten stung for the whole $150,000 and was lucky to have lost just a few 10-thousands. Chapman insists that his teams have lasted 30 to 90 days and made money. I don't think he's ever had a team make it for 15 days. It's all a scam, a con, a ruse to get as much money as possible in the team's bank so that he can steal it. The irony is that Chapman's card-counting technique works just fine, and you could use the system to make money by playing against casinos -- but he'd rather go after the players."